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Re slides below 53/dollar, sparks suspected RBI action
Voda was told about tax liability in Hutch deal: Govt
Stocks edge lower, April auto sales disappoint
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Fiat cuts India distribution tie-up with Tata Motors
Venus Remedies claims cancer breakthrough
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Re slides below 53/dollar, sparks suspected RBI action
Mumbai, May 2
Moreover, dealers say the central bank has limited firepower to intervene should the rupee continue to fall, given dollar sales would exacerbate an acute liquidity crunch in India's banking system. Economists also say India's relatively modest forex reserves — with the lowest import cover since 1996 according to a recent Bank of America-Merrill Lynch report — do not provide enough ammunition for a strong defense of the rupee. "The Reserve Bank of India was not so aggressive in intervening. They also feel that the rupee should weaken given the macroeconomic fundamentals. They will only cap the volatility," said Hemal Doshi, chief financial strategist at Geojit Comtrade. The Indian currency fell to a low of 53.02 to the dollar on Wednesday, a level last seen on January 5, before pulling back to close at 52.96/97 levels. It had closed at 52.73/74 on Monday. Four dealers said that state-run banks were seen selling dollars when the rupee broke below 53, which they said was likely on behalf of the Reserve Bank of India. Some dealers said the central bank also intervened in the rupee forwards market to offset the liquidity impact of its spot selling. "There were rumours of RBI intervention in spot market through nationalized banks and simultaneous action in FX forwards and bonds to neutralize the impact on money market liquidity," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank. The one-month offshore nondeliverable forward contracts were at 53.32. In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended around 53.26 on a total volume of $4 billion. — Reuters
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Voda was told about tax liability in Hutch deal: Govt
New Delhi, May 2 Vodafone’s tax liability has become a huge bone of contention with the government and the two sides have dug their heels in. The finance ministry issued a statement through the Central Board of Direct Taxes (CBDT) to quell reports that Vodafone had not been served any tax notice before and the issue was being raised retrospectively. The statement said that Vodafone cannot say that it had received no communication from the tax department, about the chargeability of the transaction to tax in India. “Further, it chose to ignore the advice, received before the conclusion of the transaction, that Vodafone or Hutchison Telecommunications International should approach the assessing officer under sections 195/197 of the Income Tax Act, 1961, for determining the exact tax liability in India”, it said. The Central Board of Direct Taxes in a statement said the first notice in the transaction relating to sale of 66.98 per cent stake of Hutchison Essar Ltd was issued on March 15, 2007 under section 133(6) of the Income Tax Act by the additional director of income tax (international taxation), Mumbai to Hutchison Essar in which it was asked to submit certain details regarding the transaction including shareholders agreements and memorandum of understanding between Hutchison Telecommunications International and Vodafone Group. In the notice it was clearly mentioned that, according to information available, Vodafone International Holdings BV proposes to acquire the entire issued share capital of CGP Investments (Holdings) Ltd., a company incorporated in the Cayman Islands indirectly from Hutchison Telecommunications International and the full details of the transaction was sought. When the Indian company showed its inability to submit the details, another notice was issued on March 23, 2007 in which it was mentioned that Hutchison Telecommunications International/Hutchison Group had made substantial gains from their investment in Hutchison Essar. It was clearly mentioned in the notice that the capital gains are chargeable to tax in India. It was further mentioned that if in case, parties to the transaction proposes to advance any other view, they are at liberty to approach the assessing officer. It was explained that the payer (Vodafone Group) as well as the payee (Hutchison Telecom Group) can make an application to the assessing officer under sections 195(2) and 197 of the Income Tax Act, 1961, respectively for determining the exact tax liability resulting from the transaction. This advisory of the tax department was conveyed to the parties concerned, that is, to Vodafone Group and to Hutchison Telecommunications International. This has been confirmed by Hutchison Essar in writing through their letter dated April 5, 2007. It has been mentioned by Hutchison Essar in the said letter that “we have provided copies of this letter to the concerned parties” and that this has been done solely on the request of the tax department and without assuming any responsibility or liability whatsoever for any actions and transactions of the two non-resident entities. |
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Stocks edge lower, April auto sales disappoint
Mumbai, May 2 Autos have been among the leading gainers in April, with the BSE auto index up 5.04% in April on hopes that sales will improve after an interest rate cut was seen bringing down the cost of vehicle financing loans. However, disappointment over April sales out over the past two days have led some investors to pare their bullish bets, while recent talk of a hike in fuel prices are also sparking worries about sales of petrol vehicles. "The markets saw profit booking today in auto and banking stocks" Kishore Ostwal, CMD at CNI Research said, indicating auto stocks would fall further on declining sales numbers in May as well. The 30-share Sensex fell 0.1% to 17,301.91 points, while the 50-share Nifty ended down 0.17% at 5,239.15 points. — Reuters
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New Delhi, May 2
Mobile carriers including Vodafone's Indian unit and Idea Cellular are opposing regulatory changes proposed last week that will lead to billions of dollars of spending on new spectrum bands before their permits expire starting in 2014. "What really concerns us is how the regulatory environment is shaping up for the telecom sector," said P. Phani Sekhar, a fund manager at Angel Broking's portfolio management services. "The kind of spectrum costs companies will need to pay just to keep business going, and the incremental capital expenditure if spectrum gets refarmed, could potentially wreck even the strongest of telecom companies such as Bharti," he said. TRAI has proposed that companies including Vodafone India, the country's second-largest carrier by revenue, surrender their existing bandwidth in the 900 MHz spectrum so that it can be resold to develop premium services like 3G. That means carriers would have to purchase new bandwidth in the relatively inferior 1,800 MHz band to make up for the lost spectrum, a move that would also increase their investment in new network equipment and towers. — Reuters Q4FY12 net slumps by 28.2% to `1,006 cr
Bharti Airtel, the country’s largest cellular operator by suscribers, on Wednesday posted a consolidated net profit of Rs 1,006 crore in the fourth quarter of FY 12 ended March — 28.19% lower from Rs 1,400 crore a year earlier, as net profit for the year also slid 29.6% This was the ninth straight quarterly profit decline for the firm as intense price competition and losses on foreign exchange eroded earnings. Net income was impacted by higher costs on account of 3G licence fee amortization ( Rs 106 cr), 3G interest costs (Rs 84 cr), forex fluctuation losses (Rs 132 cr) and tax provisions (Rs 198 cr). — TNS |
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Fiat cuts India distribution tie-up with Tata Motors
Mumbai/Milan, May 2 Having burnt its fingers once with the dealership network, when it launched Palio in India more than a decade ago, Fiat, in an attempt to take advantage of a booming market where foreign manufacturers like Ford, Honda and Nissan have recently acted to take more control of their own operations, said commercial and distribution activities will be handed over to a separate Fiat Group owned company, which will set up its own car dealer network in India to check sluggish sales. Fiat said on Wednesday the move should help build its business in India, a booming market where foreign producers Ford, Honda and Nissan have recently acted to take more control of their own operations. The company, which sells 20,000 cars per year in India and did not say how much it would invest in developing its dealer network there, is far behind European and US competitors in high-growth Asian markets, with scant presence in China, the world's biggest market. Fiat, which will set up a new company to sell its models and build on the network of Fiat-Tata dealerships, has a fair amount of brand recognition — its 1100 sedan was sold under licence in India from the mid-1950s to 1997, first as the Fiat 1100 Delight and then as the Padmini. The car is commonly used as a taxi. It currently sells the Linea, Palio and Punto models in India, and aims to introduce more brands from a portfolio which includes Alfa Romeo, Chrysler, Dodge and Jeep. "Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network," the companies said. A partnership producing Fiat and Tata cars and also engines and powertrains at a plant in Ranjangaon, remains in place, the two companies said. In its five years of operation, the joint venture has produced 190,000 cars and 337,000 powertrains.
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Venus Remedies claims cancer breakthrough
Chandigarh, May 2 With the development of this technology, the firm claimed it would not only reduce the amount of drug being administered to a patient because of protein and polymer conjugation, but it will also reduce the time cycle for treatment and the cost of treatment for patients. Venus Remedies CFO Dheeraj Aggarwal told The Tribune the development of this DPPC technology has already crossed the pre clinical trial stage. “We’ve already filed for patents for this technology. Since the clinical trials requires a lot of investment, we are now looking at forging a strategic alliance with some big company for conducting clinical trials on 30 cancer related polymers and launching drugs using this technique in the market,” he said. He added the strategic alliance that the company is looking at will only be for the development and market launch of the drug, and will be without diluting any equity of the company. “As of now, the company has Rs 200 crore as research and development assets, with 15-16 per cent of the topline being ploughed in its R& D facility each year”, Aggarwal stated.
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Hero MotoCorp Q4 net up 20% New MindTree director IT dept, Ludhiana collections up
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The finance ministry said Wednesday Vodafone had been informed of the tax liability in its US $11 billion transaction to acquire Hutchison’s stake in 2007 itself and it chose to ignore the advice.
Though the rupee is likely to continue facing strong support at the 53 level in the near-term, traders expect further falls, given India's fiscal and economic challenges, and fears that waning foreign flows will worsen the current account deficit.
The benchmark BSE Sensex edged lower in the first trading session of the month as auto makers such as Tata Motors fell because of disappointment over their April sales, while banks suffered from profit-taking after recent gains.
